DIVIDEND-CREDIT RULE

dividend-credit  rule.The  principle  that  a  corporate  reserve  fund  amassed  from  unpaid

dividends on preferred stock must be used to pay subsequent dividends on preferred stock before

dividend   payments   on   common   stock.   —   Also   termed   cast-iron-pipe   doctrine.   [Cases:

Corporations    156. C.J.S. Corporations § 158.] [Blacks Law 8th]